A Parent's Dementia Diagnosis: Estate Planning Steps to Take Now

When a parent is diagnosed with dementia, families often worry that it is already too late to put a will or power of attorney in place. Often it is not, but the time to act is usually now.

This guide explains how BC law tests capacity for a will, an enduring power of attorney and a representation agreement, and what you can do to help your parent plan while protecting the documents from later challenge.

A diagnosis does not end decision-making

A diagnosis of dementia does not, on its own, mean your parent can no longer make a will or sign a power of attorney. Capacity in law is not a medical label. It is assessed for a particular document, at the time it is signed. Many people in the early stages can still understand and make these decisions, sometimes better on some days than others.

BC's Power of Attorney Act starts from a presumption: until the contrary is shown, an adult is presumed capable of making decisions about their financial affairs and of understanding what it means to make an enduring power of attorney. The Act also says that how an adult communicates is not grounds for deciding they are incapable.

Dementia usually progresses, though. The practical message for families is simple: if documents need to be made or updated, do it soon, while the window is clearly open.

Each document has its own capacity test

The documents that matter most each ask a slightly different question, which is why a parent may be able to sign one but not another.

A will

Under the Wills, Estates and Succession Act, a person who is 16 or older and mentally capable may make a will. The test for that capacity comes from long-standing court decisions. In broad terms, the will-maker must understand that they are making a will and what it does, have a general sense of what they own, and appreciate who might reasonably expect to benefit, and their judgment must not be distorted by a disorder of the mind.

An enduring power of attorney

An enduring power of attorney appoints someone to manage your parent's finances and property, and it keeps working if they later lose capacity. Under section 12 of the Power of Attorney Act, your parent must be able to understand:

• the property they have and its approximate value;
• the obligations they owe to their dependants;
• that the attorney will be able to do anything about their financial affairs that they could do, except make a will, subject to any conditions in the document;
• that the property's value may decline if the attorney does not manage it prudently;
• that the attorney might misuse their authority;
• that they can revoke the power of attorney while they are capable.

A representation agreement

A representation agreement deals mainly with health and personal care. For an agreement limited to the standard provisions in section 7 of the Representation Agreement Act, which cover personal care, routine management of financial affairs, health care and legal services, section 8 sets a lower bar. An adult can make one even if they cannot make a contract or manage their own affairs. The relevant factors include whether they communicate a wish to have a representative, show choices and preferences, understand that the representative may make decisions affecting them, and have a relationship of trust with that person.

Broader agreements under section 9 require the adult to understand the nature and consequences of the proposed agreement. Our article on powers of attorney and representation agreements explains how the two documents fit together.

Steps to take now

• Book the appointment soon. Bring the diagnosis date and a list of current medications, and ask the doctor whether there are times of day when your parent is at their clearest.
• Let the lawyer meet your parent alone. Family members who will benefit should not be in the room for instructions. If a will is later challenged and the person who benefits was in a position where dependence or domination was possible, section 52 of the Wills, Estates and Succession Act can shift the burden to those defending the will to show there was no undue influence.
• Consider a medical opinion. A doctor's assessment close to the time of signing can be useful evidence if capacity is questioned later. Our article on making a will harder to challenge covers other steps.
• Review what already exists. An older will or power of attorney may still be valid. Check who is named and whether they are still the right choice.
• Look beyond the will. Beneficiary designations on RRSPs, RRIFs, TFSAs and life insurance, and jointly held property, may pass outside the will and deserve a review at the same time.

If capacity has already been lost

If your parent can no longer make an enduring power of attorney, no one can simply step in. An attorney under an earlier power of attorney cannot make a will for them.

Without a valid enduring power of attorney, family members may have to apply to court to be appointed as the parent's committee under the Patients Property Act. Notice of that application must be served on the Public Guardian and Trustee at least 10 days before it is heard. It is a court process that an enduring power of attorney made in time would usually have avoided.

Keeping your parent at the centre

These documents must reflect your parent's wishes, not the family's. The most useful thing adult children can usually do is arrange the appointment, gather information about assets, and then step back. That protects your parent, and it protects the documents from later challenge.

A recent diagnosis in the family? Plan while there is time

Our wills and estate planning lawyers can meet with your parent, take and record their instructions, and prepare a will, an enduring power of attorney and a representation agreement that reflect their wishes.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.